United States Securities Commission (SEC) seeks temporary injunction against founder structures Telegram Pavel Durov.
Commission sues Manhattan District Courtagainst Telegram Group Inc., registered in the Virgin Islands and its “daughters” TON Issuer Inc., in which it requires to withdraw all funds raised from investors in the Gram cryptocurrency project in state revenue.
Recall that Telegram managed to raise $ 1.7 billiondollars from 171 investors, selling about 2.9 billion Gram tokens. There are 39 investors in the USA who have invested $ 850 million, follows from the Telegram application filed with the SEC.
Stefani Avakyan, Co-Head of SEC Enforcement Operations, said:
"Our measures are aimed at preventing Telegram from inflicting digital markets with American tokens, which, in our opinion, were sold illegally."
“We believe that the defendants did not provide investors with information about the Gram, Telegram's business operations, financial condition, management and risk factors, as required by law,” she said.
The SEC requires a permanent injunction banning the sale of Gram and withdrawing to the state’s revenue funds received from illegal transactions, as well as “interest for the period until the court decision”.
Following the court decision to impose an injunction against Telegram structures, a statement appeared on the official Telegram Open Network (TON) channel to suspend the project.
“This decision is dictated by the increased level of uncertainty in regulation.”
The TON Board team deleted all previous messages, leaving only a promise to keep up to date.
What will happen to the project now?
According to the decision of the SEC and the court of Manhattan, Telegramcan no longer distribute Gram tokens in the United States. And here the main question arises - can Durov give out tokens to investors? If this does not happen before October 31, people will get the right to demand their money back.
(2/3) TON must go live before the 31st October to avoid having to refund investors in the amount of USD 1.7bn.
By that point, Telegram would be unable to comply with relevant regulation. pic.twitter.com/IcKuTsbUfY
- Binance Research (@BinanceResearch) October 12, 2019
On the one hand, only the SECa ban on re-sale and distribution in the secondary market, which excludes a ban on payment to investors. However, the research unit of Binance Research claims that the ban applies to this.
In the latter case, Durov may have realproblems, because he will not only have to look for $ 1.7 billion, but also money for fines. Let's hope that Durov can get out of this situation, otherwise there will be no talk of any Telegram cryptocurrency.
Pavel Durov made a statement about the ban on the Gram cryptocurrency from the SEC.